Promised crackdown withers amid delays, legal challenges

November 9, 2011

For a decade, hazardous emissions from a refinery regularly swept into a mostly poor, minority neighborhood in Corpus Christi known as Hillcrest, where residents complained of odors, dizziness, vomiting and a range of conditions from asthma to cancer.

In June 2007, jurors found the refinery’s owner, Citgo Petroleum Corp., guilty of two felony criminal violations of the Clean Air Act for failing to control emissions of benzene, a carcinogen, from two massive, uncovered tanks at its refinery on the southern cusp of Texas.

It seemed a major victory for the federal government in its quest to punish Clean Air Act violators. The Justice Department, which prosecuted the case, and the Environmental Protection Agency, which investigated Citgo, said the verdict sent an important message.

“Today’s convictions are a strong signal to the industry that emissions controls are not optional and those who knowingly disregard the regulations will face the consequences,” said[4] Ronald J. Tenpas, then an acting assistant attorney general who oversaw a staff of hundreds in the Justice Department’s environment division.

Four years and five months later, Citgo has yet to face consequences. The company is still awaiting sentencing, a delay that serves as a striking symbol of the federal government’s tepid level of prosecution of Clean Air Act violators.

In policing the nation’s polluters, criminal prosecution is the government’s most potent weapon. Congress passed legislation 21 years ago to strengthen criminal enforcement and encourage the EPA and the Justice Department to go after the worst violators of air pollution laws.

But an investigation by the Center for Public Integrity’s iWatch News[5] shows the extent to which this vision has gone unrealized.

Consider the numbers:

Since 1990, among thousands of criminal environmental cases, fewer than 800 Clean Air Act cases have led to fines or prison time — the fewest of any of the three major environmental laws designed to protect air, water and land. Almost twice as many Clean Water Act cases have been opened, and twice as many have resulted in fines or prison time. Water pollution cases have led to twice the fines, and solid waste cases have triggered twice the prison time.

Just a scant few Clean Air Act cases have focused on air pollution from industrial plants. More than 6 of every 10 cases involved a single provision of the law governing safe handling of asbestos while demolishing or renovating buildings. Excluding asbestos cases, five times as many Clean Water Act cases have resulted in fines or incarceration, and solid waste cases have resulted in five times the prison sentences.

More criminal cases have led to fines or prison time for violations of rules involving reformulated fuels than for toxic air pollution that burdens hundreds of communities across the country. A toughening of the Clean Air Act in 1990 directed the EPA to focus on nearly 200 hazardous air pollutants because of their potential to cause cancer, brain damage and other ailments. Since then, only five criminal cases focusing primarily on air toxics rules have led to penalties, EPA data indicate.

Only 5 percent of all Clean Air Act cases resulting in fines or prison time since 1990 have focused on types of violations that could signal significant polluters affecting nearby communities: violations of stack emissions limits, tampering with monitors, falsifying records or illegally releasing hazardous air pollutants. By comparison, about 20 percent of all Clean Air Act cases have focused on rules phasing out substances that could damage the ozone layer; many of these cases target smugglers of banned chemicals.

The unfulfilled promise of the Clean Air Act is hardly a secret within the legal system. “There’s a widely held view among prosecutors that there has been too little prosecution of Clean Air Act cases historically,” said David Uhlmann[6], who headed the Justice Department’s Environmental Crimes Section from 2000 to 2007 and is now a law professor at the University of Michigan.

In a response to iWatch News, an EPA spokesman acknowledged the traditional emphasis on cases involving asbestos and ozone-depleting substances. But he said five years ago the agency placed new emphasis on other types of Clean Air Act cases. EPA now has more than 100 Clean Air Act criminal cases under investigation in these other areas, he said.

Air pollution cases present unique challenges, lawyers and enforcement officials told iWatch News. The Clean Air Act is the most complex of the major environmental laws, and evidence can be less tangible and more open to challenge. Accused polluters often have deep pockets to stretch cases along, prompting the EPA and the Justice Department to pursue financial settlements instead of criminal trials.

It’s not that companies aren’t violating air pollution rules. Regulators have caught some gaming the system, and the cases don’t appear to be isolated. “I don’t think they’re getting to all that should be investigated criminally,” said Fred Burnside[7], who was the national director of the EPA’s criminal enforcement office until leaving last December. “The criminal program can’t investigate them all, so they have to take the worst of the worst. They take the ones they hear about.”

As of August, EPA data show, nearly 300 sites have been tagged as “high priority violators[8]” of the Clean Air Act for at least a decade. And roughly 400 sites across the country are on an internal EPA “watch list” that includes serious or chronic polluters that have faced no formal enforcement action for nine months or more.

Just being on the list doesn’t mean a company broke the law, but Burnside said criminal enforcement officials sometimes used the list as a starting point for identifying scofflaws. “I think there are things being missed because the criminal side is not as plugged in as it could be,” Burnside said.

The low level of criminal prosecutions shows that the EPA is reluctant to wield its biggest stick — the start of a domino-like effect that can let companies off the hook, leave communities unprotected and undermine Washington’s apparent intent: deterring future law-breaking and convincing companies it’s in their best interest to follow the rules.

Grappling with evidence that is ‘up in smoke’

Criminal cases are supposed to target the worst offenders who meet the EPA’s threshold criteria of “significant environmental harm and culpable conduct.”

The system of rules designed to limit air pollution relies heavily on companies to self-report, leaving room for unscrupulous managers to game the system. Criminal investigations are supposed to target those offenders who lie, cheat or manipulate the rules in the name of profit.

Yet in a system that fosters self-regulation, it’s often difficult to detect when a company is lying. Many criminal cases begin only with a tip from a whistleblower or disgruntled former employee or an observation by a vigilant inspector.

Air pollution cases are perhaps hardest to identify. If a company violates water pollution laws, it may kill fish or visibly despoil the waters. If a company illegally dumps hazardous waste, the pollution source often can be easily traced.

“With air cases, your evidence is up in smoke,” said Mike Burnett, the special agent in charge of the EPA’s criminal office in Kansas City, Kan. The violations may not be clear even to a trained inspector. Criminal investigators often need someone to tell them where to look — say, for doctored reports or evidence of tampering with equipment.

The EPA says it launches investigations into only 20 percent of the leads it gets, and about a third of these cases result in criminal charges. An investigation can take years, depending on the case’s complexity.

Prosecutors often eschew cases that don’t involve clear harm. But proving harm in air pollution cases can be especially tough. Lying to the EPA may undermine the honor system on which regulators rely, but “it’s hard to get prosecutors excited about those cases,” Burnett said.

In 2008, for example, the Office of Inspector General for the Tennessee Valley Authority, a federally owned electric utility, documented a history of leaks[9] at some of the utility’s power plants. Managers had failed to report the leaks to regulators, as required. The office, working with EPA criminal enforcement officials, presented the case to the U.S. Attorney’s Office for the Northern District of Alabama. The office declined to prosecute. A spokesperson for the office declined to comment.

The emphasis placed on pollution cases can vary significantly among U.S. Attorneys’ offices. “Some don’t consider environmental crimes to be as important as other crimes,” former EPA criminal enforcement head Burnside said.

Judges rarely hear Clean Air Act cases, and prosecutors must weigh whether the law’s complexities, and the science behind it, will sit easily with juries.

“Will it be so complicated that the average juror won’t be able to grasp the regulatory structure necessary to get a conviction?” asked Bruce Pasfield, who worked until 2005 as a prosecutor in the Justice Department’s Environmental Crimes Section and now defends companies[10] facing prosecution.

A common defense: Paint the regulations as so confusing that complying is nearly impossible.

“The defendants’ job, and they do it very, very well, is to make it as complicated as possible, to blow as much smoke into the courtroom as possible,” said Eric Schaeffer, a former top EPA enforcement official who co-founded the nonprofit Environmental Integrity Project[11] in March 2002. “And we’ve seen situations where [it] felt like … we were about to get an obvious jury verdict in a criminal case, [but] the jury’s confused by the facts and the law.”

Perhaps the government’s most ambitious prosecution of a Clean Air Act case produced a defeat in 2009. For years, the EPA and the Justice Department alleged, the chemical company W.R. Grace knowingly exposed the residents of Libby, Mont., to asbestos from its mine. At least 100 residents died from asbestos-related diseases, and hundreds more were sickened in what the Justice Department called[12] “one of the largest environmental and public health disasters the nation has faced.”

The company fought the case in court, and ultimately, a jury acquitted Grace and three of its executives.

Few cases target big plants

There have been successes. From 2005 to 2009, the government won convictions[13] of pipe manufacturer McWane Industries for environmental crimes across the country, including Clean Air Act violations.

This October, Pelican Refining Company pleaded guilty[14] to Clean Air Act and other violations at its Lake Charles, La., oil refinery and agreed to pay $12 million in criminal penalties and $2 million for environmental projects. The company admitted incorrectly operating or completely bypassing some pollution control equipment. A company vice president and a manager[15] have also pleaded guilty and face substantial fines and possible prison time when they are sentenced.

But such cases are rare. Changes to the law in 1990 were supposed to make criminal prosecution of companies that flout air pollution laws a more realistic threat, but that hasn’t played out in the years since.

Before 1990, air pollution violations were typically misdemeanors. Prosecutors often forgo such cases in favor of felonies that carry more severe penalties. The 1990 Clean Air Act Amendments made a number of offenses felonies — following the lead of environmental laws governing water and solid waste. Now companies and managers could face prosecution for knowingly violating air pollution rules, falsifying records, tampering with air monitors or placing a person in danger by negligently releasing hazardous air pollutants.

Until the change, most Clean Air case cases targeted a section of the law governing the safe handling of asbestos during building renovations or demolition, a 1993 EPA memo noted. But the 1990 amendments should change this, wrote Kathleen Hughes, acting director of the criminal enforcement counsel division, in the memo. “Criminal cases will inevitably extend beyond the present realm of asbestos violations and involve groundbreaking and challenging investigations and prosecutions,” she wrote[16].

For the most part, that has not happened. Since 1990, roughly 62 percent of Clean Air Act cases leading to fines or prison time involved asbestos. These cases, Burnside said, "are sort of low-hanging fruit." In recent years, Burnside said, the agency has shifted some of its focus toward large industrial plants and tried to limit the number of asbestos cases. EPA data indicate the agency has started to cast a wider net of Clean Air Act cases, but about 40 percent of all investigations opened during the 2010 fiscal year still targeted asbestos.

The number of cases focusing on air pollution from industrial plants is strikingly small. In addition to asbestos cases, another 20 percent of all Clean Air Act cases producing fines or prison time since 1990 involved a section of the law designed to phase out substances that damage the ozone layer. Many of these cases target smugglers of banned substances.

Prosecutors in the Justice Department’s environment and natural resources division also prosecute violations of the Migratory Bird Treaty Act, which are investigated by the U.S. Fish and Wildlife Service. Since 1990, twice as many cases under this law have led to fines or prison time as cases primarily focused on the release of toxic air pollution.

In fact, just 5 percent of all Clean Air Act cases resulting in fines or prison time since 1990 have focused on violations of stack emissions limits, tampering with monitors, falsifying records or illegally releasing hazardous air pollutants. Another 10 percent don’t fall under a specific category, EPA data show.

Other changes in 1990 were supposed to make it easier to prosecute companies that violated air pollution rules. Before the Clean Air Act Amendments, many plants were subject to multiple sets of requirements, each to address a certain type of air pollution. The changes in 1990 sought to make air pollution requirements more like those for water and solid waste: Under the law’s Title V, large air pollution sources would have a permit that consolidated the different requirements that applied.

“There was a general sense that Title V would create a more easily prosecutable set of offenses,” said former prosecutor Pasfield. “Except we never saw a significant increase, at least on the criminal side. … In looking back, I think that Title V was not the panacea that we all thought.”

Congress that year also passed the Pollution Prosecution Act, directing the EPA to boost the criminal investigative force to 200 by 1995 and to maintain that level. Between 1998 and 2009, however, the number of investigators decreased. In the 2010 fiscal year, it topped 200 for the first time since 2004.

After Sept. 11, 2001, some EPA criminal investigators were pulled into homeland security work and assignments protecting the agency’s administrator.

At the EPA, opened criminal investigations decreased almost every year from 1998 to 2008 — a downward trend that began slowly turning around in the 2009 fiscal year. Still, because fewer investigations were opened in recent years, fewer are now resulting in convictions. In the 2010 fiscal year, fewer environmental crimes cases resulted in fines or prison time than in any year since 1996.

Cases can drag on for years, blunting any deterrent or retributive effect.

“At some point, you’re grinding through this case, the children living near the plant, they’ve grown up if they’ve survived, and … either they’re going to carry that cancer because they’ve already been exposed, or they’re out of the community,” Schaeffer said. “You’ve not helped the people that you stepped in to try to do something for.”

A dearth of prison time

Even when the Justice Department puts its muscle behind a criminal case, it may not bring prison time.

In 2009, Heraeus Metal Processing Inc. pleaded guilty[17] in federal court to making false material statements after investigators said a company manager at a Tennessee plant created false logs detailing how the company was operating air pollution control equipment. In court, the company admitted it broke the law but said it takes environmental compliance seriously.

Under its plea deal, Heraeus was ordered to pay a $350,000 fine and serve 18 months’ probation. The company manager, who investigators accused of forging others’ initials and directing falsification of documents, pleaded guilty[18] and received one year of probation and 50 hours of community service.

Sometimes people do go to prison for falsifying records — on car emissions. Two months after the Heraeus plea, a Missouri man was sentenced to 10 months in prison for a Clean Air Act violation: faking vehicle emissions test results.

In Tennessee, Heraeus’ precious-metal reclamation facility stands within two miles of three schools and near the Frozen Head State Park and Natural Area. Advocates say its proximity shows why the laws are important.

“The plant is less than a mile from a state park,” said Sandra Goss, executive director of Tennessee Citizens for Wilderness Planning[19]. “They have all this delightful, beautiful pristine wilderness land which helps everyone in the watershed have cleaner water and natural air.”